2020 has been whirlwind year of changes as people adapted to the new realities of living and working in a pandemic. Individuals and companies had to adjust their ways of living and working.
For listed companies, a fundamental activity is an Annual General meeting. Traditionally, apart from AGM’s being a regulatory requirement, they are also the main event by which companies engage with their shareholders, and for companies to obtain necessary shareholder approvals on voting resolutions. With the many restrictions on public gatherings to minimize the spread of COVID-19, traditional ways of holding AGM’s was not possible. Companies increasingly had to look at digitization to assist virtual ways of meeting and working, including e-learning and e-health.
Digitalization is defined as, “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities,” according to Gartner, Inc. Professor Bitange Ndemo in one of his recent articles in the local dailies questioned our readiness in the global reset? He stated, “Digitalization has changed the rules of success and only those that embrace it will harvest its fruits”.
C&R Group has long adopted technology as a key enabling factor for service delivery. As far back as 2017, C&R had started developing its digital platform as a parallel service channel to physical service channels for share registry. Virtual AGM’s is one of the services on the C&R Digital platform. Before COVID-19, C&R Group was evaluating hybrid AGM’s as a way of including shareholders who are typically not available for physical AGM’s but whose impact can be felt when companies require market buy-in for corporate activities.https://candrgroup.co.ke/publication/the-missing-shareholder-an-analysis-of-the-lack-of-shareholder-representation-in-annual-general-meetings-agm/. With this end in mind, in 2019 we delivered the 1st Hybrid AGM (both in person and virtual) for a Public Listed Company in Africa https://candrgroup.co.ke/publication/cr-group-delivers-the-1st-hybrid-agm-in-africa-through-sharehub/.
Fast forward to the beginning of the 2020 AGM period, typically around May of each calendar year, and the recent Governmental declaration in March of COVID-19 as a national pandemic. The way forward was for companies to either delay their AGM’s, and therefore delay critical shareholder interactions, or adopt digitization and hold Virtual AGM’s. At C&R Group our previous experience with holding a hybrid AGM and our significant investment in technology, gave us the platform to be able to execute fully virtual AGM’s.
As market leaders we consider it a responsibility to partner with the regulators and our clients in steering the industry to higher levels of digitalization. In light of this, we would like to share the following tips on running a successful virtual AGM;
COMPLIANCY– the company must obey the mandates set by the relevant regulatory authority that governs them. The Capital Markets Authority (CMA) in Kenya granted public companies approval to hold virtual general meetings after a court order issued by the High Court of Kenya in Miscellaneous Application No. E680 of 2020 on Wednesday 29th April 2020. This court order ensured that companies listed in the NSE were compliant to hold online Annual General Meetings. Many companies have used the opportunity to pass critical resolutions to amend Articles of Association to allow for electronic meetings and communications in the future.
THE RIGHT PLATFORM- In a physical AGM, there is necessary vetting of eligible shareholders before participation. Virtual AGM’s must have the same functionality to vet and ensure that only valid shareholders register vote and ask questions. Necessary functionality include shareholder/member registration, attendance tracking capability, voting and polling ability, shareholder/ member communications portal, a question and answer function that enables full participation and lastly a live- streaming broadcast functionality.
PREPARATION- Physical AGM’s are a one day event, which requires the commitment of set committees or departments and months of preparation to ensure the day’s success. Virtual AGM’s are no different and they require the same level of preparedness. We advise having a rehearsal AGM with the Board Chair, CEO, Company Secretary, Auditors, CFO and board members and any senior executives that will play a role or have a presentation during the AGM before the actual AGM day.
COMMUNICATION- To ensure transparency, we highly recommend that AGM notices have an explanation to the members, on the protocols for the company’s virtual AGM, whether provided for by the company’s articles of association or provided for by regulatory directives. Proxies are a key representative for some shareholders and a proper and clear guideline on shareholder/member/proxy registration should be provided. It is also important to ensure that all meeting materials are readily available in the company’s website as well as the results of any voting or responses to questions.
The Annual General meeting is a network for shareholders to interact with their directors and management in a productive way and share constructive market and management feedback, concerns and ideas. C&R Group’s (https://digital.candrgroup.co.ke/) online platform is an innovative and robust system which offers full virtual AGM functionality, providing a unique virtual experience for both the shareholder and the company.
The tips highlighted are only the tip of the ice berg; there are more factors that will ensure the success of your AGM. Get in touch with us (Call: +254 020 760 8216 Email: bd@candrgroup.co.ke) and experience our expertise in managing your virtual Annual General Meeting (AGM).
Irene Mugua – Business Development Supervisor
C&R Group
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